In the last three decades, literature on governing the commons emphasized on stability of institutions. However, insufficient attention was given to institutional change and institutional performance. To fill the existing knowledge gap, the study was conducted in Babati District, Tanzania, which implements decentralized forest management (DFM). Case study, a survey and Geographic Information Systems (GIS) research methods were used in data collection. Qualitative data analysis was done by relating the ideas of respondents to abstract concepts. Quantitative data was analyzed using descriptive statistics and t- test. Spatial data for determining species composition was analyzed using GIS. It is demonstrated that both constitutional and operational changes occurred under DFM in Babati. Institutional changes were found to be associated with improved condition of forest resources, good governance and sustainable livelihoods. Use of multiple research methods, test validation of research findings in conferences and workshops ensured the validity of the findings.